Jose Cuesta Dominic Richardson

1. The Office of Research-Innocenti: UNICEF’s dedicated
centre for research and knowledge sharing
“Harness the power of evidence as a
driver of change for children”

2. Our mandate
The OoR-Innocenti works in support of UNICEF’s global mandate by:
Undertaking high quality research with programme and policy relevance
Setting standards and providing guidance to other parts of UNICEF, including for
ethical considerations
Working through the global network of UNICEF Regional and Country Offices,
National Committees and other partners (governments, academia, civil society)
Our research agenda - 2018-2021
(1) High quality research on key questions that promote children’s rights, well-being and development
(2) UNICEF staff equipped to generate, support and use high quality evidence, including conforming to ethical standards
(3) Provide a space for key stakeholders globally to catalyse research, dialogue and advocacy on issues affecting children

3. Research & evidence as a driver of change for children
Children continue to face chronic poverty, deprivation and exclusion
Impacts of humanitarian crises & global challenges, such as displacement, urbanization and
climate change, in which evidence is limited
SDGs agenda calls for transformative & intersectoral approach to global issues
Emerging middle-income countries – demands for upstream and policy advice
New digital technologies, big data and information flows – both opportunities and challenges
We need to understand evidence gaps, ‘why’, ‘what works’ and ‘how to implement reforms’.
1 billion Children live in
poverty
10 million Children are refugees
61 million School-aged children remain out of school
One third of adolescent girls in developing countries are married
before 18

4. Evidence Generation
• Child rights and child protection
• Child poverty and equity
• Social Protection (Cash Plus;
Humanitarian Settings)
• Education and learning
• Migration, displacement and
child rights
• Adolescent well-being and
development
• Gender and social norms
Outcomes
• Global Kids Online
• MODA
• IE Cash Plus in Tanzania
• Bullying global monitor
• Children on the Move
• Handbook on adolescent
development research
• Super Daddy (ongoing)
• Digital divide also affects equity
• UNICEF is global leader in
measuring child poverty
• Innovative SP programs in SSA
• Improved global diagnostics
• Children having a voice
• Adolescence “revival”
• Changing attitudes to parenting and
violence among fathers
Impacts
Evidence synthesis, use and capacity strengthening
• Evidence maps
• Ethics in research
• Training
• Evidence maps
• Ethical Considerations when using
social media for evidence generation
• MDCP training in Montenegro
• Huge gaps in policies on adolescents
• Research at UNICEF is ethical!
• Train trainers
Research functions at Innocenti

5. Fiscal Policy and Equity in Uganda: Commitment to
Equity for Children
Jose Cuesta

6. What is this all about?
 Framework that integrates PF4C (child-related budgets); child poverty
measurement; and fiscal policy analysis
 Improve evidence base on child specific distributional effects of fiscal
policies
 Vision: a recognized, rigorous tool to generate evidence, participate in
country policy dialogue, improve programming
 Proof of concept Country applications CEQ4C tool (global public good)

7. Background
Children disproportionally affected by poverty; Break intertemporal
transmission of poverty; new child-specific SDGs
The size and composition of investments on children and the way they
are financed have wellbeing and distributional consequences
Fiscal incidence analysis widely used for 40 years
Unicef is at the forefront of PF4C and MDCP work
All strands highly complementary (macro-micro, input-outcome) to
improve child wellbeing & equity
But they have not yet been truly integrated in a tool that goes from
measurement to programming with a child lens

8. What do we mean by “child lens”?
 Child as unit of analysis;
 Spending relevant to children (“child budget”)
 Specific policy questions around child wellbeing

9. Child focused integrated questions
What share of public spending in a given country do
multidimensionally deprived children benefit from?
Are targeted social transfers benefiting the most deprived (highly
MDP) children?
How tax burdens are borne across households with MD poor
children?
To what extent public spending on children redress inequalities of
consumption/income /wealth?
What are the expected effects of changing the composition and scale
of public spending or a proposed fiscal reform into child poverty?

10. CEQ4C: Towards an integrated approach

11. Proof of concept: Uganda

12. Step 1: Defining child budgets
UGSh, (billions) % of GDP CEQ Included? Child budget?
Total expenditure 7,454 12.1% 4.8%
Defense spending 749 1.2% No No
Social spending 2,817 4.6% Yes
Social protection 344 0.6% Yes (indirect)
Social assistance 84 0.14% Yes Yes (indirect)
Cash transfers 84 0.14% Yes
Noncontributory pensions --
Near cash transfers --
Other --
Social insurance 260 0.4% Yes Yes (indirect)
Education of which 1,504 2.4%
Preschool -- Yes (direct)
Primary 750 1.2% Yes Yes (direct)
Secondary 528 0.9% Yes Yes (direct)
Postsecondary nontertiary Yes (direct)
Tertiary 202 0.3% Yes No
Health 969 1.6% Yes
Contributory Yes (indirect)
Noncontributory Yes (indirect)
Housing and urban 24 0.04% No No
Subsidies 129 0.21% Yes
Energy
Electricity
Fuel
Food
Inputs for agriculture 18 Yes No
Water 91 Yes No
Rural electrification 9 Yes No
Infrastructure 2,595 4.21% No No

13. Step 1: Revenue in CEQ4C

14. Step 2: Linking child budget with individual
incomes
Personal income tax,
contributions to social security
Public Works Program (PWP);
Household Income Support
Program (HISP); the Senior
Citizen’s Grant (SCG); and the
Vulnerable Family Support
Grant (VFSG).
VAT; excise taxes
Corporate taxes
Agricultural, electricity and water subsidies
(but not as child budgets)
1ry, 2ry education, clinic and hospital
services
All labor incomes, capital incomes, auto-consumption,
imputed rents, remittances,

15. Step 3: MDCP in Uganda

16. Step 3: MDCP in Uganda

17. MDCP and monetary poverty in Uganda

18. Step 4a: Diagnostics of FIA with a child lens
Source: Author analysis based on UBS 2014. Transfer 1 refers to the Public Work Program; Transfer
2 to the Household Income Support Program; Transfer 3 to the Senior Citizen’s Grant; and Transfer 4
to the Vulnerable Family Support Grant.

19. Step 4b: Poverty and inequality effects from
fiscal action

20. Step 5: Policy simulations

21. Step 5: Policy simulations
Simulation Cost of reducing 1 pp of
child poverty (UGSh
billion)
Expected administrative costs How to maximize poverty impact?
1 (end educational gap) 337 Moderate to high costs required to
accommodate almost 4 million new students
Reduce unitary costs of providing
education to almost 4 million new
students
2 (spending shift and
MDCP targeting)
393 Low cost of eliminating subsidies, moderate
cost of targeting beneficiaries based on MDCP
Increase unitary benefits to a large
number of beneficiaries (which
implies increasing total resources
redistributed)
3 (spending shift, MDCP
targeting and VAT
reform)
5,900 Low cost of eliminating subsidies and
replacing old VAT rates, moderate cost of
targeting beneficiaries based on MDCP
Increasing revenues from VAT
reform will most likely increase
poverty. Increases funds for
redistribution requires other
financing sources (PIT reform).
4 (spending shift and
monetary poverty
targeting)
69 Low cost of eliminating subsidies, moderate to
high cost of targeting monetary poverty
(almost four times lower incidence than
MDCP)
Success of this policy comes from
targeting a smaller group of
beneficiaries.
5 (spending shift,
monetary poverty
targeting and VAT
reform)
78 Low cost of eliminating subsidies and
replacing old VAT rates, moderate to high
cost of targeting monetary poverty
Success of this policy comes from
targeting a smaller group of
beneficiaries.

22. Key messages from CEQ4C Uganda
Child budget is low in Uganda (even across LICs)
Hugely different monetary and MDCP measures
No “surprising” FIA: progressive primary education, regressive
secondary education and hospital, neutral clinic services, very small
cash transfers
Life-cycle distinct poverty and inequality effects
Reducing the education opportunity gap has a relatively low cost
Removing subsidies and MDCP targeting to children not much of an
impact < 0.5 pp in poverty headcount (many beneficiaries, low benefits)
Targeting based on Monetary or MDCP does matter (number of
beneficiaries, amount of transfer)

23. References
Cuesta, J., J. Jellema, Y. Chzhen and L Ferrone 2018. Fiscal Policy, Multidimensional Poverty, and Equity in
Uganda: A Child Lens on Fiscal Incidence Analysis. Office of Research Innocenti Working Paper, 2018-03
https://www.unicef-irc.org/publications/pdf/WP-2018-03.pdf
Cuesta, J. 2014. “Social Spending, Distribution, and Equality of Opportunities: The Opportunity Incidence
Analysis.” World Development 62: 106–24.
Cummins, M. 2016. Child-Focused Public Expenditure Measurement: A Compendium of Country Initiatives,”
PF4C Working Paper No. 2, UNICEF
Jellema, Jon, Nora Lustig, Astrid Haas, and Sebastian Wolf. 2017. The Impact of Taxes, Transfers, and
Subsidies on Inequality and Poverty in Uganda CEQ Working Paper 2016-33 (updated June 2017)
http://www.commitmentoequity.org/wp-content/uploads/2017/08/CEQ_WP53_Jellema-Lustig-Haas-
Wolf_June2017.pdf
Lustig, Nora, editor. 2018. Commitment to Equity Handbook. Estimating the Impact of Fiscal Policy on
Inequality and Poverty (Brookings Institution Press and CEQ Institute, Tulane University). Advance online
version available here.

24. Resources
Innocenti Office of Research (MDCP)
https://www.unicef-irc.org/MODA/
PF4C https://www.unicef.org/socialpolicy/index_43058.html
Commitment to Equity http://www.commitmentoequity.org/

25. The Office of Research-Innocenti
Equity in education finance for children

26. PF4C, Education and Equity
• Investing in children is considered to be the main vehicle for social and
economic development…
…and breaking cycles of disadvantage
• Strong longitudinal evidence in support of its effects
• But the education system cannot do it alone
To meet priorities for equitable learning,
Education finance for children needs to better understand:
 Complementarity with other sectors
 Life course effects
 Policy design moderators (how money is spent)
 Improve measurement

27. Budget expenditures on the system of education, share of GDP (World Bank data)
How much money is spent on education –
example of Belarus

28. Complementary welfare policies supporting equity
in education
• Family tax benefit increment in Australia
• Further / higher education supplements (AT, CH, CZ, and DE)
• Mexico’s CCT for school attendance
• Equipment and clothing grants (FR, IE, IL, KR, and PT)
• Free school meals, breakfast clubs (MX, UK, and US)
• Out of school hours care (All-day schools in DK, UK, US and more)

29. How other money is spent on children matters
Source: OECD Family database, 2017
OECD Family spending (2013), Belarus, 2017 - as a % of GDP

30. When money is spent on children matters
Age spending profile – OECD country average (2011)
Source: OECD Family database, 2017
USD (PPP)
Age of child

31. Learning for development? Education and
investing in children
• The richest countries in the world invest 3 in every 5 ‘child’ dollars on
compulsory education
• Often this doesn’t start until age 5-6
• Education linked in longitudinal studies to:
• Higher incomes
• Employment
• Better health
• Lower risk-taking (drug use and criminality)
• Improved socialization (non-cognitive skills)

32. Educational expenditure in the LAC region
Source: Edstats database.

33. Education makes up the largest child investment
in most countries - Chile
Source: OECD Family Database.
USD (PPP)
Age of child

34. A closer look at the compulsory years: education
dominates
Source: OECD Family database

35. Key points on the ‘when’ and ‘how’ of govt.
spending – issues for education
• Theories of optimal investment suggests that public spending should
decline as children age – but practice is different
• There are critical times in the life course for targeted interventions, not
always accounted for
• brain development / physical development / labour market attachment
• Home environment factors / health account for a significant proportion of
the variation in educational outcomes
• Yet all of these policy areas combined receive less public investment than education
• Path dependent spending, and fixed costs in education, calls for innovation
in integrated approaches to improve efficiency/effects on learning etc.

36. Understanding education spending – key points
• Education as a percentage of GDP / Education as percentage of Govt spending
• In mature systems, commonly represents running costs only
• Education per capita spending requires caution
• Education is a long-term human service, and so an aggregate of
• Fixed, variable (running) and cumulative costs (and economies of scale – non linear effects)
• Compare teachers salaries and school building (can be non-linear in trends)
• Path dependency in spending
• Data quality and accuracy concerns
• Reporting governance (missing millions at the local level?)
• Financial integration / pooled budgets / true spending
• That expenditure levels equal quality levels is not a safe assumption

37. Public expenditure by type and NEET rates in
OECD countries
Source: Richardson et al., Report to the European Commission, 2014

38. Understanding education spending – key points
• Education as a percentage of GDP / Education as percentage of Govt spending
• In mature systems, commonly represents running costs only
• Education per capita spending requires caution
• Education is a long-term human service, and so an aggregate of
• Fixed, variable (running) and cumulative costs (and economies of scale – non linear effects)
• Compare teachers salaries and school building (can be non-linear in trends)
• Path dependency in spending
• Data quality and accuracy concerns
• Reporting governance (missing millions at the local level?)
• Financial integration / pooled budgets / true spending
• That expenditure levels are equal quality levels is not a safe assumption

39. Types of research using education finance /
expenditure data
• Nonetheless we need the info for studies of:
• Cost effectiveness analysis
• Cost benefit analysis
• Age spending profiles / mapping
• Order of expenditure (age-related investment in education) and policy priorities
• Trends analysis
• Macro-pooled times series

40. Some reflections
• Education policy efforts should include reflection on the ‘type and timing of
spending’ and ‘cross-sectorality’
• Earlier investment / preschool effects
• Children’s poverty / health risks increase the strain on schools
• Knowing how much is spent on education is important, but…
• Understand context of expenditure / competing and complementary interests
• Spending aggregates should always be interpreted with caution
• Equity in spending in on education does not mean equitable outcomes
• Too many exogenous factors at play
• Cumulative investment / life course issues also complicate
Further reading: Investment Case for Education and Equity
https://www.unicef.org/publications/files/Investment_Case_for_Education_and_Equity_FINAL.pdf

41. Thank you!
https://www.unicef-irc.org/research/education/